Delinquencies Find New Low in March, But Will It Last?

According to CoreLogic, the nation’s delinquency rate in the U.S. in March 2022 hit its lowest recorded point since at least January 1999, as found in its latest monthly Loan Performance Insights Report.  

In March of this year, some 2.7% of all mortgages in the country were in some stage of delinquency, as defined as being at least 30 days past due. Compared to February 2021, this is a 2.2 percentage point drop from the original 4.9%. 

In March2022, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows: 

• Early-Stage Delinquencies (30 to 59 days past due): 1%, unchanged from March 2021. 
• Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.4% in March 2021. 
• Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.4%, down from 3.5% in March 2021 and a high of 4.3% in August 2020. 
• Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.2%, down from 0.3% in March 2021. This remains the lowest foreclosure rate recorded since at least January 1999. 
• Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.5%, up from 0.4% in March 2021. 

The national mortgage delinquency rate once again declined year over year and reached another historic low in March, with foreclosure activity following suit. 

According to CoreLogic, a strong job market and income growth will continue to drive down the number of property owners who are late on their mortgage payments, while rising home prices and the resulting equity gains are providing alternative options to those who may be coming out of forbearance and/or facing foreclosures. 

In the first quarter of 2022, homeowners saw equity increases by more than 32% year-over-year, with the average borrower earning nearly $64,000 over the past year. 

“The share of borrowers in any stage of delinquency was at an all-time low in the first quarter of 2022,” said Molly Boesel, principal economist at CoreLogic. “However, more than one-third of delinquent mortgages remain six months or more past due on their payments. While we may see an uptick in distressed sales over the coming year, historic home equity gains should keep these sales from reaching elevated levels.” 

Click here to view the report in its entirety.